$8000 Tax Credit for First Time Homebuyers Expires This Friday, April 30th

The $8,000 tax credit for first-time home buyers will expire this Friday, April 30th. So if you’re in the market for a home, NOW is literally the time to buy. Following are the details of the program:

Earnings Threshold: Couples can earn up to $225,000 a year. The limit is $125,000 for singles.

Home Purchase Price Threshold: Home cannot cost more than $800,000.

Occupancy: Credit is only for primary residences. If you sell the home within three years of purchasing it and take the credit, you will have to repay it. Another caveat is that you CAN NOT have OWNED a primary residence (ie, have purchased a home and lived in it), for the past three years. If you’ve done this, you are not considered a “first-time” homebuyer.  

Trade Up Allowance: If you’ve lived in your current primary residence for at least five years, you can trade up to another home and get a $6,500 tax credit.

The Real Deadline: While a contract must be signed by this Friday, April 30th, you have until the end of June to close.  

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Special Extended Deadline for Military, Foreign Service and Intelligence Professionals

. . . for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011 (emphasis added) [Source: FederalHousingTaxCredit.com]

How to Claim the $8,000 Tax Credit

This tax credit is part of President Obama’s economic stimulus package. It allows first-time homebuyers to receive a 10% credit for a primary residence purchase on their 2008 or 2009 income taxes.  

To claim this credit,  all you have to do is claim it when you file your annual income taxes. There are no separate forms or filings necessary. And, you can file amended returns to claim the credit if you failed to do so durying a qualifying year.

Question: If I buy a home in 2010 and the tax credit can only be claimed on returns for the years 2008 and 2009, how do I get the credit? Do I still qualify for it?

Answer: The answer is yes, you do qualify for it. To explain, the program’s original deadline for expiration was November 30, 2009. With its extension to April 30, 2010, you can get the tax credit for purchasing a home in the year 2010 by filing an amended 2009 income tax return to get the credit.

Help with Down Payment and Closing Costs

FYI, you can get help with your downpayment and closing costs if you’re buying a home. Many prospective homebuyers don’t realize it, but some states have special 1st time homebuyer grants and loans that allow qualified homeowners to borrow all or part of the tax credit, which can be used to help with down payment and closing costs.

Ask your mortgage consultant or lender about programs you may qualify for. Also, do some research on the internet to see what you can find. Believe it or not, your loan officer, mortgage consultant or lender may not be aware of what’s available to you, as new programs are coming out all the time.

Get full details on the $8,000 Tax Credit for First-time Homebuyers.

Lost a home to foreclosure or “almost foreclosure” (eg, short sale, deed in lieu of foreclosure) in the last few years?

All is not lost. You can still qualify for a home loan under Fannie Mae guidelines.

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Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.